A Less-than-Green Budget

The Government yesterday announced a fairly disappointing budget result for environmentalists.

We noted in our blog a few weeks ago that electric cars are only as green as the power which charges their batteries. It’s all well and good imposing legislation which incentivises car manufacturers to adopt hybrid and electric car technologies; but only if supported by an infrastructure which provides a balanced mix of clean renewable energy with less-clean fossil fuel and – of course – nuclear output.

Yesterday was certainly a hit and miss for environmentalists. Philip Hammond has promised £400 million to improve electric car charging infrastructure – a key pre-requisite for the mass adoption of battery-powered transportation (although it is yet to be seen what sort of impact this money will actually have in evolving the UK’s ageing power infrastructure towards a peak-load situation once EV adoption has really taken off). Also announced – charging a car at work will not be subject to a benefit-in-kind tax.

But green power generation took a back seat. Funding of further renewable energy projects through levies on electricity bills has been shunned until 2025; which experts believe poses a threat to the development of emerging renewable technologies such as wave & tidal. Good news (or at least not bad news) for high-usage consumers at least in the short term. In addition, a freeze on carbon tax will drive no extra incentive for private investment in green power generation. More broadly, technology seems high on the agenda – with a further £500 million investment in 5G and artificial intelligence research, with an additional £2.3 billion extra funding for R&D.

In the world of oil & gas, legislation has finally been introduced to make the development of mature offshore fields more attractive for independent oil & gas companies – allowing tax credits to be transferred between sellers and buyers (which in turn enables the new owning entity to reclaim a proportion of decommission costs, when that time comes). The struggling North Sea industry will welcome any changes to stimulate the prolonged use of our declining hydrocarbon reserves; but this could be another blow for environmental campaigners who would have preferred further backing of the UK’s renewable future.

About the author

Rod Westwood

Rod’s industry experience stems from a decade working in business consultancy specialising in the global oil & gas industry. During this time, he has provided commercial and market expertise to support finance raising and equity investments totalling in excess of $10 billion for clients in more than 50 countries. His passion for technology & energy go hand in hand in the development of the UtilityClick software platform.